By Julian Harrison-Tubb

While the winter clouds are starting to roll in, the sun is still shining warmly on South East Queensland’s residential property markets.

Deriving from a low base, there has been a strong increase in sales volumes in 2010; however, volumes still remain lower than expected with properties taking longer than average to sell.

The market is currently finely balanced between buyers and sellers with neither group showing a distinct hold on the market. However, recent reports have confirmed a significant increase in renovation activity.

Historically, figures show an increase in this type of activity when housing affordability becomes an issue. The costs of selling, increasing interest rates, and the prospect of selling into a soft market appear to be behind this trend.

The fewer number of transactions, particularly in the lower end of the market, mean that there is a lower level of new rental stock entering the market leading to increased upward pressure on rents. While the rental market has remained strong over the past quarter South East Queensland has not seen the large rental increases experienced in 2009. The current level of activity is expected to sustain throughout 2010.

Interestingly, in February, the Queensland State Valuations Service of the Department of Environment and Resource Management revalued 23 local government areas, providing a barometer and comparison of property values across the state. While some land valuations had been undertaken as recently as 2007, others had not been revalued since 2004 revealing some large land value increases reflecting the property boom between 2005 and 2008 and the affects of recent economic downturn.

We note that the inner city suburb of Woolloongabba had an increase in median land value of 24 percent to $440,000 since the previous valuation (Queensland Government land Values). The median for the whole of Brisbane has increased 11 percent to $290,000.

The Redland Shire in Brisbane’s Bayside experienced a 35 percent median increase in land values. Alexandra Hills experienced a 50 percent increase in median land value from the previous valuation to $195,000. Capalaba also showed an increase of some 50 percent. The Moreton Shire, to the north of Brisbane also showed a 34 percent median increase overall with some outer suburbs such as Kallangur showing an increase of up to 69 percent bringing the median to $185,000.

We continue to remain positive about the prospects of the Queensland residential market. Despite the Queensland economy slipping down the state rankings to 5th, Queensland still enjoys strong population growth and a robust economy.

The finely balanced supply and demand equation equilibrium together with interest rate rises will make for an interesting coming quarter in the property industry.

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